Financial Planners

Retirement Income Certified Professional

This is a rather long title for a new designation for Financial planners, but apparently many of them are seeking to become educated on how to use a reverse loan for retirement planning.

Needless to say, many Advisors refuse to acknowledge the benefits of using funds from a reverse loan, instead of drawing down on a retirement portfolio, but more are becoming open to the suggestion that there are benefits to be had to their clients by using this option.

And article was recently published discussing this new certification and how quickly many financial advisors are undergoing the education to qualify for it’s designation that will “brand” them as current on financial matter and innovative and open to new ideas in retirement planning.

Program Teaches Financial Planners Strategic Use of Reverse Mortgages.

May 20, 2015

A growing number of financial advisors have looked to new designation programs to better guide retirees on how to plan for retirement.

One such program, which teaches advisors about the strategic use of reverse mortgages, has grown in popularity since springing up three years ago — perhaps because of its uniqueness.

The Retirement Income Certified Professional (RICP) designation became the fastest-growing financial advisor credential ever launched in The American College of Financial Services’ 88-year history, according to a recent article on ThinkAdvisor, which notes that some 1,500 financial planners have completed the program, and another 7,000 are currently enrolled.

“The program was designed specifically to address retirement income planning,” said David A. Littell, RICP Retirement Income program director at The New York Center for Retirement Income at the college. “We thought that was what advisors needed. That is what they were asking for. That is what the industry was looking for.”


Written by Emily Study

I will post the remainder of the article tomorrow.

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New Reverse Mortgage Rules

With the “new” rules in place, more Financial Advisors are beginning to take a more serious look at using reverse loans for their clients.   I won’t go into the “rules” here, but suffice to say that one of them is giving less money to the applicant and at some point this year, a Financial assessment will be put into place, to make certain that the borrower will have the ability to continue to pay their property taxes and homeowners insurance.

When it happens, I will share that information here, along with any updates on the newest entry into the reverse loan market.   That would be Jumbo loans that I wrote about in a previous post.

Here is the remaining article that discussing an article that was recently published in the journal, Financial Planning.

Financial Planners: New Rules Make Reverse Mortgages Attractive

Posted By Cassandra Dowell On August 28, 2014 @ 6:50 pm In Reverse Mortgage

“Other notable changes that took effect recently include married couples [3] can now get a home equity conversion mortgage (HECM) even if one spouse is younger than 62, however, a married applicant often can borrow less than had been the case.

“For seniors who are short on liquid funds for an emergency,” Kinney says. “HECM line of credit can be a lifesaver.”

Kinney’s father opened a HECM line of credit just a few months before Hurricane Sandy hit. After his father’s home was hit, he was able to use the HECM line to pay contractors when payments from insurance companies and government agencies were delayed.

“Thanks to the reverse mortgage, my father was able to get his house back into living condition much faster than many of his neighbors,” he says.”

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Financial Planners and Reverse Mortgages

Reverse loans have not been considered by Financial Advisers to be a viable option when it comes to retirement planning and if anything they have been very, very negative about them.

The main reason I think that this has been their prevailing attitude, is because they have never fully understood them and how they can actually benefit retirement planning if used as part of one of the options for a plan.

Gradually, their attitude has begun to turn around, albeit very slowly but many of them are now seeing how the use of a Stand Alone Reverse loan can extend retirement funds for their clients.

Plus, the majority of the Boomers are still carrying a mortgage on their homes and will be burdened with payments and may not be able to retire.  Rather than drawing down on a portfolio of investments,  funds from a Reverse loan can pay off any existing mortgages and offset any income shortages and cover any other unforeseen costs that may occur in the future.

The trade journal to Financial Planners recently ran an article talking about the benefits of the FHA HECM program and why they should seriously being to consider this to be another avenue to solidifying a retirement fund.

Here is a copy of the article with the remaining portions to follow in the next couple of posts.

Financial Planners: New Rules Make Reverse Mortgages Attractive

Posted By Cassandra Dowell On August 28, 2014 @ 6:50 pm In Reverse Mortgage | No Comments

“Financial Planners should consider recommending reverse mortgages for elderly clients and for the parents of middle-aged clients, writes Financial Planning in a recent article [1], noting that new rule changes [2] position the product to better protect borrowers.

“[Reverse mortgages] can be a very useful tool for seniors who plan to stay in the home for a long time,” Jim Kinney, who heads Financial Pathway Advisors in Bridgewater, N.J., tells Financial Planning.
However, Kinney cautions, reverse mortgages are not a good fit for those who do not have the resources to maintain their home.

As a consequence, applicants now must undergo a financial assessment in order to qualify for a loan; lenders are required to make sure a borrower can pay for insurance, taxes, and home maintenance, based on the applicant’s assets and cash flow.”

The last paragraph is not entirely correct.   As of this time, the financial assessment is not being done but we anticipate it to be in place before the end of the year.  There will be no “pass” or “fail”, but rather if it’s determined that the borrower might have some difficulties paying their property taxes and homeowners insurance, the lender will create an Escrow account to cover these expenses.

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